Will Meta Platform do a stock split in 2024?

Meta Platforms is the only “Magnificent Seven” stock that has never had a split.

News of a stock split can increase interest in a company, even if it has no significant impact on the underlying investment. But whether it has any actual impact or not is immaterial because stock splits usually generate a buzz around the stock.

One stock that is feeling neglected these days is Meta Platform ( Meta 5.14%,What was formerly known as Facebook has yet to split. But the social media company has seen its stock price increase significantly since 2023 and is now trading at over $500 per share. Is a split likely this year?

Meta is no stranger to jumping into the hype

Whether it’s copying new features from its competitors, joining the excitement around artificial intelligence (AI) by launching its own assistant, or trying to create its own cryptocurrency, Meta often likes to join the crowd. Implementing a stock split appears to be par for the course, if the company decides to follow suit on that too.

After all, it’s the only company in the “Magnificent Seven” that hasn’t yet done a stock split. Microsoft It has not recently implemented any splits, but it has implemented several splits in its history.

Now that Meta’s price is around $500, it is at a high enough price for a split, after which the shares would still be trading at a fairly fair price. Here are some scenarios that could be possible:

split ratiostock price after split
2 for 1$250
3 for 1$167
4 for 1$125
5 for 1$100
6 for 1$83
1 for 7$71
1 for 8$63
9 for 1$56
1 for 10$50

Calculated by the author.

If Meta Stock implements a split, I would assume it wants to keep its price at least above $100. This has typically been around the target area for other tech stocks after splits. Chipmakers nvidia recently did a 10-for-1 split, and its stock is trading at around $120.

There is certainly room for Meta to do a stock split and stay above the $100 mark. I wouldn’t be surprised if the company announces it this year, especially if the stock continues to rally.

Investors should be more concerned about whether Meta stock will split

For investors, what ultimately matters is the long-term outlook for the business, not whether the company is likely to announce a split. While its fundamentals are strong, with Meta reporting an impressive profit of $45.8 billion over the past 12 months, the company may face some challenges.

Its growth rate has improved over the past year, but it wasn’t that long ago when this business was in trouble and struggling to grow. I believe the crackdown on TikTok and Elon Musk’s transformation of X (formerly Twitter) have played a role in the improvement. I don’t think Meta has suddenly found a button to turn its growth around and fix all its problems.

It is still heavily dependent on demand in the advertising market, and that could soften if the economy goes into a recession. Meanwhile, as it continues to spend heavily on the metaverse and its Reality Labs division, as well as AI, its profit margins could also shrink.

meta growth rates and profit margins; By data YCharts. YOY: Year over Year.

Investors should proceed with caution with Meta Platforms stock

The stock split could give Meta’s shares a boost, but it’s not something investors will be able to rely on for sustained gains. There’s still a lot of risk and uncertainty surrounding the business: namely, whether its growth rate is truly sustainable in the long run.

Investors have seen how quickly the market can react to Meta’s poor performance, with it falling more than 60% in 2022. Buying this stock as it trades near its all-time high could be dangerous right now.

Randi Zuckerberg, the former director of market development and spokesperson for Facebook and sister of Meta Platform CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. David Jagielski has no position in any stocks mentioned. The Motley Fool has positions in and recommends Meta Platform, Microsoft, and Nvidia. The Motley Fool recommends the following options: long $395 calls due in January 2026 on Microsoft and short $405 calls due in January 2026 on Microsoft. The Motley Fool has a disclosure policy.

#

Disclaimer : The content in this article is for educational and informational purposes only.

Leave a Reply

Your email address will not be published. Required fields are marked *